Country’s largest lender State Bank of India’s (SBI) exposure to Russia which is facing sanctions following invasion of Ukraine are less than $10 million. Banks would get 10 days to complete the processing of payments which were already in the system to avoid near-term problems for businesses and trade.
While getting clarity for the entire system exposure remains work in progress, the bank (SBI's) has small transaction exposure (less than $10 million), senior bank official said.
Following sanctions imposed on transactions with Russian entities, Reserve Bank of India (RBI) moved in to find a way for stuck payments. It is collecting information from all the banks on the nature of exposure. Based on the feedback, banking regulator will come out with action plan, senior bankers said.
According to new agency Reuters, the European Union (EU) is excluding seven Russian banks from the SWIFT messaging system that underpins global transactions as part of its sanctions over Russia's invasion of Ukraine.
Generally, payments in the pipeline are exempted from sanctions but no new one can be put into system. Such relaxation was given when strict measures were imposed on Iran as well, said a senior public sector bank (PSB) official.
The government and RBI are working on steps to have mechanism for payments side to continue for trade and business and exploring use of the rupee-rouble arrangement is part of that work. A senior bank official said while structuring bilateral payment mechanism, the country will have to look at sharp fall in value of Russian currency in the last few weeks.
Russia does not buy many things from India, but the country procures in abundance from Moscow. The rupee–ruble arrangement was not used much in the last 10-15 years, official added.